News of mine closure raises questions

For more than 40 years, millions of tons of black coal excavated from the Seneca mine near Hayden have fueled the fires of the Hayden Power Station.

The surface mine also has provided steady work to residents of Routt and Moffat counties with some of the highest wages in Northwest Colorado.

After speculation about the mine's lifespan, the Seneca Coal Co. officially notified the mine's 100 workers in November that the mine had depleted its economic reserves and will close by the end of 2005.

Although the news didn't come as a surprise to many residents, including mine workers, Seneca's long history in the region raises questions about the effects the closure will have on workers and the regional coal mining industry.

Economic effects on Routt and Moffat counties may be harder to gauge. Although economic experts are concerned about the loss of high-paying jobs, they predict effects of the closure will be minimal in Routt County, except in Hayden, which may feel the brunt of the closure through loss of tax revenue.

"Economies, including ours, are reasonably diverse," said Scott Ford of the Small Business Development Center at Colorado Mountain College. "Because it's diverse, it's resilient."

Ripple effects

The mining industry produced about $47 million in labor income in Routt County in 2002, according to the 2005-06 Community Indicators Project, a compilation of economic and other information about Routt and Moffat counties, released by Yampa Valley Partners.

Comparatively, the fast-growing construction industry generated more than $133 million in labor income -- about 21 percent of Routt County's total labor income in 2002.

Although mining's share of labor income -- about 7 percent -- may seem small, it continues to be an important economic base because of the wages it provides workers, said Audrey Danner, executive director of Yampa Valley Partners.

"Mining is a very important sector of our economy, it's one of the highest annual-wage jobs we have," she said.

The average annual wage of miners in 2003, which include hourly rates, bonuses and overtime, was $61,021 -- about $16,000 more than the average annual wage in the construction industry, according to the CIP.

The only sector reporting a higher average wage was utilities, which reported a $65,805 average annual wage.

Seneca's closure will mean less spending power for workers. How that will affect local communities is hard to measure because of leakage of retail dollars to other areas, Ford said.

Also hard to predict is how many workers could leave the region for similar work at other mines.

"I wouldn't be surprised if we see some out migration because the skills they are involved in are in demand, and they will go where the money is," Ford said.

Overall, economic results of Seneca's closure are like the ripples produced by a rock thrown into a pond: The effects will depend on the size of the rock, which will be the most disruptive at the place of impact, he said.

In this situation, Hayden is that place of impact.

In addition to losing retail dollars, Hayden will lose a significant amount of property tax dollars, which benefit Hayden schools and other West Routt entities.

The "lion's share" of Seneca's property taxes are based on assessed values of land where there is mining activity, Routt County Assessor Amy Williams said.

If the mine closed Dec. 31, the soonest the community would feel tax loss would be 2007.

Although Seneca's closure will have considerable effects on workers and the communities where they live, the region's diverse economic bases, including flourishing construction and tourism industries, likely will keep the overall economy on its toes, Ford said.

"It's not the kind of thing that will crack the wall. ... We're diversifying at such a rapid pace right now, we'll move on," he said.

The workers

When the mine closes, some workers will transition into reclamation work, which likely will continue through 2006, mine officials said.

Because Peabody has not yet indicated when the mine will close or how many workers will be retained for reclamation work, some workers have been left wondering whether they should begin looking for jobs.

Many of those with a long history at the mine either plan to collect retirement, allowing them to pursue side work such as ranching, or are high on the seniority list and confident they will be helping with reclamation work.

It's the younger workers and the older ones low on the seniority list who may be hit hardest by the layoffs.

"I feel sorry for the bottom 20 or 30. ... They are all real young kids with families trying to get started in life," said welder Will Montieth, who has worked at the mine for almost 30 years. "They are the ones it will affect the most."

Although news of future layoffs is never good, some such as Montieth are taking the good with the bad and remain thankful for their time at the mine.

"The mine has treated me really well for the last 30 years. ... I've made a lot of money, I've put a lot of money away, and I've had fun," he said.

It's an opportunity fewer young workers will inherit.

Seneca and Twentymile mines have provided young workers opportunities to learn a trade and make a good living in the valley, said Crecencio "Chencho" Salazar of Hayden, who has worked at Twentymile mine for about 28 years.

"They (Seneca) have a lot of local people," he said. "It's good for the valley because it keeps local kids here."

Many workers are optimistic they will be able to transfer their skills as welders, electricians, mechanics and heavy equipment operators to other industries.

"I've been through layoffs before," said Denny Wells of Craig, who has worked at Seneca since June. "It's not anything new to me."

Wells has done mine work for about 10 years and worked at Peabody mines in Arizona and Montana before starting at Seneca. He and his wife like the area and are debating whether he should look for work in the valley or find another mine job elsewhere, he said.

Most laborers at Seneca are part of the United Mine Workers of America. The union's contract, which expires in September, will have to be renegotiated, said Bill Kleckler, president of the local UMWA.

Although laid off employees can be put on a panel and be considered for other union jobs in the Southwest, pursuing opportunities at other mines is largely up to the workers, Sutton said.

Some have acquired a lot of years at the mine but won't be quite old enough to collect retirement. Others, like 53-year-old Terry Green, who is two years from retirement age, haven't worked at the company long enough to amass much retirement.

Green always has lived in Routt County, where he spent 25 years ranching. He turned to mining after losing a ranching lease on land.

Green has been an equipment operator at Seneca for about three years and hopes his chances of doing reclamation work will improve as others retire this year.

Although he's hesitant to apply for a job at Twentymile, where workers spend a lot of time on their feet, he also wonders about his chances of getting hired in construction or another industry.

Although younger workers have the strength and stamina to transition to other industries, some are skeptical they will receive the same wages and full medical benefits they enjoy at Seneca.

"There's a lot of them that are looking," Kleckler said. "They just haven't found anything comparable."

Construction work may be more competitive than some people realize, considering good equipment operators and mechanics are hard to find, Montieth said.

Montieth maintained it's too early to panic about job loss.

"I don't worry too much," he said. "A lot of things can happen in the next few years."

The industry

Together, Seneca and Twentymile Coal Co., a top-producing underground operation, produced about 9.5 million tons of coal, making Routt County the second highest producer of coal in the state in 2003, according to an annual Energy Information Administration report.

The effects of Seneca's closure on Routt County's coal production, however, will diminish on a regional and national scale. Nationally, Seneca ranks 129th for coal production among about 1,300 coal producing mines.

Twentymile mine, which produced more than 8 million tons of coal in 2003 and employs about 380 people, was ranked 18th among the nation's top coal producers, according to EIA data.

In Moffat County, the Colowyo mine between Craig and Meeker, and Trapper Mine near Craig, collectively produced almost 8 million tons of coal in 2003.

One of the most apparent effects of Seneca closing fall on Xcel Energy, which operates the Hayden Station and has been considering other short-term and long-term sources of coal.

Peabody Energy and Xcel are in the process of renegotiating a contract providing coal to the Hayden Station through 2011.

Peabody spokeswoman Beth Sutton said the negations were confidential. She said speculation was unfounded that Peabody Energy might reopen Seneca as an underground operation in the future.